Employment contracts under the 2021 labour law

Federal Decree-Law No. 33 of 2021 regulating employment relations replaced the previous federal labour law and took effect in February 2022. Employers who have not revisited their templates since are working from a superseded instrument.

What changed structurally

Private-sector employment moved to fixed-term contracts. Unlimited contracts under the old law were to be converted. An employer still issuing an unlimited-term template is not merely out of date; it is issuing a contract that does not match the form the law contemplates.

The law also set out several work models — full-time, part-time, temporary, flexible — rather than assuming a single pattern, which gives employers a lawful route to arrangements that previously sat in a grey area.

What this touches in practice

• Notice. Notice periods and the consequences of terminating within or outside them follow the contract term, so a template carried over from the old regime may specify something the current law treats differently.
• End of service. The gratuity calculation is set by the law and sits on the contract's basic salary. Firms that structure heavily around allowances should know what that does to the accrual.
• Non-competition. The law permits restrictive covenants within limits on duration, geography and scope. A clause drafted without those limits in mind is the kind that is read down or set aside when it matters.

Free zones are not automatically outside this

Some free zones apply their own employment regulations, and the two financial free zones plainly do. Others sit under the federal law. "We are in a free zone" is not an answer to which regime applies — the zone is.

What to do

Pull your current template and compare it, clause by clause, against the decree-law and its executive regulations as they now stand. Where a standard form has been issued for your situation, start from that rather than from your own precedent.

The law and its regulations are on the UAE Legislation platform, and the operational material is published alongside them. This is an orientation; an employment position turns on facts, and this article has none of yours.